“Doc” was a friend of my father. He had been a P-51 pilot serving in Europe during the Second World War. One day I asked “Doc” what his greatest worry had been as a pilot. He looked off in the distance and then sighed: “Son, you never want to run out of runway!”
“Doc’s” words have come back to me many times over the years; especially when talking to clients about their retirement planning! How many time I have met with retirees and pre-retirees who are concerned about their financial future. They are afraid their retirement income will not be sufficient. They are afraid they might outlive their money. They are afraid they are going to “run out of runway.”
In many ways these retirement fears are well-founded. A 2011 study by the Employee Benefit Research Institute found that only 13% of American workers were “very confident” about having a comfortable retirement. The study also found that almost 50% of workers were “not too” confident or “not at all” confident that they would have a comfortable retirement.
A generation ago, Americans equated a comfortable retirement with the safety afforded by Social Security and a company pension plan. The guaranteed monthly payments provided by Social Security and a pension ensured that retirees would always have a steady monthly cash flow. Times have changed. Today only 11% of Americans have access to any type of pension program. Increasingly, workers have to rely on retirement savings programs like a 401K or IRA, plans that can be subject to market volatility and cannot provide the assurances of a guaranteed lifetime income.
How can you make sure that you “don’t run out of runway?” Is there a way to ensure that your money lasts as long as you do? There certainly is! It is a program that guarantees income for your entire life. It is an annuity with guaranteed lifetime income. An annuity is basically a contract with an insurance company. In the annuity contract, the insurance company makes specific guarantees. In this case, the guarantee is a specific income stream over a given period of time. Income can be guaranteed for a number of years or for the lifetime of the insured. You will never run out of money. In addition to the income guarantee, there are contracts that offer additional benefits, such as a death benefit or increased funds for long term care. A lifetime income annuity can be a great tool to make sure that your money lasts as long as you do.
To learn more from this annuity professional, click here (Pat Kerfoot).
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